Europe surges, US stumbles, China cools: EV gross sales dip in 2026

1.2 million EVs have been bought globally in January – however the market shrank. International EV gross sales fell 3% year-over-year and 44% in January 2026 from December to 1.2 million models, based on Benchmark Mineral Intelligence. The slowdown was largely pushed by China, the place gross sales dropped after new taxes and weaker incentives kicked in.

China cools after tax and subsidy adjustments

China, the world’s largest EV market, bought round 600,000 EVs in January. That’s down 20% year-over-year and 55% in comparison with December. Given China’s outsized position within the international market, that drop is the primary purpose worldwide gross sales have been down.

Two coverage adjustments kicked in at the beginning of 2026: EVs at the moment are topic to a purchase order tax for the primary time since 2014, and the nation’s trade-in scheme is much less beneficiant than it was in 2025.

Whereas EVs in China aren’t but dealing with the complete 10% buy tax that applies to fuel automobiles, most at the moment are topic to a 5% buy tax. On the identical time, the trade-in subsidy shifted from a flat-rate cost to a proportional system, which means common incentives are decrease, particularly for smaller, lower-priced EVs. After greater than a decade of tax exemptions and aggressive subsidies, 2026 is shaping as much as be a extra market-driven yr for China’s EV sector.

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Europe props up the worldwide market

Europe was the brilliant spot.

The area bought greater than 320,000 EVs in January, up 24% year-over-year, although gross sales have been down 33% from December. Europe was the fastest-growing main area in 2025, and it’s persevering with that momentum into 2026.

Automakers are nonetheless underneath strain to fulfill EU tailpipe emissions targets. Whereas these targets have been softened in 2025, EV gross sales nonetheless have to maintain climbing if producers need to keep away from fines.

Subsidies are additionally again in a number of key markets. The UK, Germany, and France have all reintroduced EV incentives, they usually noticed year-over-year progress of 14%, 25%, and 41%, respectively.

Not each nation had a powerful January. Norway’s EV market plunged 71% year-over-year and 92% month-over-month after patrons rushed to buy automobiles earlier than tighter VAT exemptions kicked in on January 1, 2026. The Netherlands additionally noticed a pointy drop – down 28% year-over-year and 64% month-over-month – after the same pre-buying surge forward of upper taxes on firm automobiles.

North America’s EV slowdown deepens

North America had a tough begin to 2026.

The area bought about 90,000 EVs in January, down 33% year-over-year and 27% in comparison with December. The US drove most of that decline, with January 2026 marking the nation’s lowest month-to-month EV gross sales since early 2022.

The market remains to be adjusting after the Trump administration killed federal EV tax credit on September 30, 2025. The rollback of CAFE fines and protectionist insurance policies aimed toward localizing car manufacturing and provide chains has additionally reshaped automakers’ plans. Ford, GM, and Stellantis have all taken multi-billion-dollar write-downs as they pivot components of their North American methods away from EVs.

Canada is making an attempt to stabilize its market after ending its nationwide EV subsidy in January 2025. In January 2026, Canada and China reached an settlement permitting as much as 49,000 Chinese language-made EVs into Canada on the most-favored-nation tariff fee of 6.1%. That’s the primary time since October 1, 2024, that Chinese language EVs have been allowed in at a tariff fee under 100%.

Remainder of world surges

Outdoors the three main areas, EV gross sales almost doubled year-over-year.

The remainder of the world bought about 190,000 EVs in January, up 92% from a yr earlier. South Korea, Brazil, and Thailand led the positive factors.

Thailand had a document month, with EV gross sales greater than tripling year-over-year to over 44,000 models. Automakers have been granted an extension to register automobiles underneath Thailand’s EV3 scheme via January 2026. Alongside client subsidies, the EV3 and EV3.5 applications supply decreased import duties on totally built-up EVs, offered these imports are offset by native EV manufacturing. Thailand additionally reduce excise taxes on EVs beginning January 1, 2026.

Electrek’s Take

January is all the time a wierd month for auto gross sales, particularly in China, the place year-end incentive adjustments can create large pre-buying waves. A 44% drop from December appears to be like dramatic, however seasonality issues.

Nonetheless, the larger story right here is coverage.

China is dialing again incentives. The US has already eradicated federal tax credit and softened gas financial system penalties. Canada ended its subsidy and now has a brand new commerce take care of China. Europe, in the meantime, is reintroducing subsidies and tightening emissions guidelines.

If 2025 was about explosive progress, 2026 appears to be like extra like a stress take a look at. Markets that also have robust coverage assist are rising. Markets that pulled it again are seeing gross sales cool, a minimum of for now.

The worldwide EV transition isn’t going to reverse; it can continue to grow. It’s simply turning into extra uneven and extra political.

Learn extra: Tesla pushed EV costs decrease in January, however gross sales saved sliding

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